The allegations and arrests related to corruption in Quebec — until recently merely staggering in their breadth and scope but largely municipal in nature — jumped into the major leagues Wednesday with the arrest of former SNC-Lavalin CEO Pierre Duhaime.

Previously, the Charbonneau Commission and raids by the province’s police anti-corruption squad focused on municipal civil servants and smaller construction firms. The revelations were not minor, but they were mostly local.

The arrest of Duhaime has elevated the level of alleged corruption into a much higher echelon.

SNC-Lavalin is the largest engineering firm in Canada, and among the largest in the world. According to its own records, it employs 28,000 people working on 10,000 projects in 100 countries. Its success was a source of provincial pride.

Worse still, the arrest of Duhaime was linked to SNC-Lavalin’s contract to build the $1.3-billion superhospital for the McGill University Health Centre, one of the largest public health-care projects in Canada. Du­haime and another former SNC executive are charged with using a counterfeit document to cheat the MUHC. La Presse has reported allegations the anti-corruption squad was investigating whether SNC-Lavalin paid $22 million to obtain the $1.3-billion contract.

In addition to demoralizing local taxpayers, the barrage of construction-related graft serves as more fodder for the multitudes of Quebec haters happy to think corruption is a way of life in the province.

It’s important to remember, said Concordia University economist Marguerite Mendell, director of the Karl Polanyi Institute of Political Economy, that corruption is not a disease unique to Quebec; nor is it endemic. The ailment is surfacing because public pressure finally forced the creation of a much-needed commission and anti-corruption squad, which will hopefully spur improved governance to heal it.

“It doesn’t get any uglier than this. … But this is not folkloric, and it should not present us as the capital of the universe for corruption,” she said. “There are elements of this problem in the financial crisis in the U.S., and in the U.K., where heads are rolling.

“It’s almost as if we’re in an age of unravelling after a too-long period of laissez-faire and greed that has spilled over, not just into making lots of money and a speculative Wild West kind of financial environment, but to too much power to people in high places.”

Michel Magnan, professor at Concordia’s John Molson School of Business, cautions that much of the information thus far involves allegations, not proof, in what is a relatively small pond.

“The province of Quebec, and Montreal in particular, is a very small world where people from various ways of life (politics, business, government, universities) mingle and interact on a continuous basis,” he wrote in an email. “Hence, a significant number of people are likely to have been in contact one way or another with some of the individuals who are alleged to have engaged in either illegal or improper activities.”

If the allegations are proven, the question becomes how these actions were allowed to happen for so long, Mendell said, with city councillors and corporations saying they knew nothing.

“It’s preposterous,” she said. “We have a real governance issue.”

She advises that project stakeholders such as McGill University or the City of Montreal improve their due diligence. The Charbonneau Commission can serve as the impetus not only to remove rot, but fix the structural problems that allowed it to fester unseen. Securities commissions enforce mechanisms for operating within the stock market and do due diligence on companies, she noted. Public contracts require the same oversight.

“How is it that this goes on and people are blindsided by it? It’s because it’s not visible. … I think as citizens we have a right to demand greater transparency. This is where the government plays a role, and the voters that elect it. …In the long run it’s a structural and institutional issue — there’s just too much leeway and freedom for this to occur — what kind of structure can prevent this from happening? What kind of accountability measures?”

The superhospital was built as a public-private partnership under the stewardship of Jean Charest’s Liberals, noted Concordia political science professor and public policy expert Guy Lachapelle. The premise was that bringing in private-sector players would diminish costs, but it appears to have had the opposite effect, Lachapelle said, while also alienating members of the civil service who felt they were better placed to ensure rigid governance.

“You would think that after our experience with the Olympics — we knew there was lots of corruption at that time, it led to the Cliche commission — we would have learned,” Lachapelle said. “Instead, these kind of things seem keep coming back all the time.”

More stringent, independent committees are needed to oversee public contracts, he said. “We need to put in place all the red lights,” to control expenses.

What’s crucial now, said Mendell, is that journalists and the business community show the rest of the world Quebecers are outraged by the allegations, as opposed to complacent. But they also need to promote the positive work being done.

“They need to demonstrate the very ethical and moral economy in this province that’s productive and contributing to the wealth of society in general, all the innovative sectors like aeronautics and biotechnology and pharmaceuticals that are in a sector outside this corrupt and messy place … so Quebec can have some sense of pride in their community.“

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